OLED Lighting Manufacturing’s Future?27 Oct 2011 • by Natalie Aster
In the past two years, the OLED lighting business has shifted from being one entirely consumed by R&D to the production of actual products. For now, however, these products are confined to luxury table lamps and chandeliers with price points measured in thousands of dollars and volume sales measured in the thousands of units, if that. Production issues are secondary considerations for such products; from the production standpoint, OLED lighting is currently a cottage industry.
One reason for OLED lighting being so niche-like is that, at today's costs, OLED lights can be no more than playthings for the rich. True, there has been some progress. Two years ago, the one or two OLED luminaires that were on the market were affordable only by billionaires. Today there are more than 30 such luminaires available and they can be purchased even by millionaires. But no one is expecting to see OLED lighting at their local supermarket-or even their local department store-before 2015 or so.
There are some commentators (without any demonstrated history in this market) who apparently believe that OLED lighting will never get beyond the luxury market. Today, for example, you can buy OLED lighting from a very high-end furniture store such as Roche Bobois and some analysts believe that is where they are going to stay.
NanoMarkets are not in this group of analysts and, more importantly, it seems safe to assume that it is unlikely that firms of the caliber of GE, LG, Osram, Panasonic Philips, Samsung and so on would have gone into the OLED lighting business with luxury luminaires made by craft workers solely in mind. Almost certainly, their assumption is that eventually OLED lighting will reach a point where it is generally affordable and that, along with LEDs and CFLs, OLED lighting will be used widely in general illumination applications.
Certainly, most of the firms that NanoMarkets has talked with as part of its ongoing research into emerging markets in the OLED lighting space have bigger visions of where OLED lighting is headed. Most observers of the OLED lighting scene believe that OLED lighting will present a genuine challenge to more mature forms of lighting by 2015 or so, although much will depend on the ability of the OLED lighting firms to come up with OLED lighting product designs-including the luminaires-that will make this possible, both in terms of design (including form factor) and price point. Even if OLEDs take just a very small share of the global lighting market, we think this technology will ultimately generate billions in new business revenues. At least some of the large firms that have entered this space clearly seem to believe the same thing.
A Capacity and Opportunity Analysis of OLED Lighting Manufacturing
Published: October 2011
Price: US$ 2,495.00
Manufacturing Business Models of the Future in OLED Manufacturing
In fact, the uncertainties that now prevail with regard to manufacturing in the OLED lighting business are a lot more all-encompassing than answering the question, "who will build facilities and when?" It is also a question of the kind of manufacturing business model that will emerge in the OLED lighting space and how sustainable manufacturing plans and business models are in the very uncertain business climate that currently exists.
One very important aspect of all of this is the degree to which OLED lighting firms of the future will rely on a fabless approach. There will, without doubt, be plenty of smaller OLED lighting firms whose goal will be to serve specialist markets (such as medical lighting) or luxury markets, who will, without question opt for a fabless model. This will create an opportunity for the emergence of what would be called "foundries" in the semiconductor industry, but might be called something else in the OLED lighting industry, although the term "foundry" fits.
What form will these foundries take? One possibility-and a fairly likely one we think—is that they will be organizations whose focus is OLED specific and they would devote themselves to making OLED panels for outside designers and IP owners in the OLED display and lighting space. As OLED technology becomes more common, we think there will be plenty of demand for this kind of foundry service. The design and product strategy variations for OLEDs seem almost endless and it will be natural enough for some firms to focus on extracting value from the design potential of OLEDs and not want to bother too much with the manufacturing issues that OLEDs present. On the supply side, the fact that such manufacturing issues exist is reason enough for an OLED foundry of this kind to come into being.
But as far as we know, this has not yet happened. There are some firms around that have expertise in the appropriate deposition methods and perhaps even know something about the finer points of organic chemistry. These could manufacture OLEDs on a subcontract basis, but it would be stretching a point to call such organizations "foundries." There are also organizations with appropriate skillsets in functional printing to print OLEDs, although solution processing OLEDs seems to be a problem in itself.
What is unclear though is when the larger firms—the ones that plan to use OLEDs to penetrate mass markets with OLED lighting-will start to build the large plants that will make this possible. At the moment there seems to be some (understandable) reluctance for building such plants; quite apart from the specific technology and market risks that relate to OLED lighting, the worldwide economy is not being especially helpful in this regard. In fact, some firms in this space may well be very reluctant to make manufacturing investments in this space at the present time, although they do not seem to be admitting to this. One illustration of what we mean here could well be Konica Minolta, which has entrusted its early manufacturing of OLED lighting to Philips, despite the fact that Konica Minolta has long made it clear that it wants to be a major player in the OLED lighting market and—if it succeeds in achieving it—Philips and Konica Minolta would be direct competitors. It is hard to resist the conclusion that Konica Minolta is being cautious in today's uncertain climate.
Still, such an alliance seems like it must be temporary, but one never knows for sure at this early stage of the game. But even if in the long run it this kind of "coop-itition" becomes no longer viable, it does not entail that all the large suppliers of OLED lighting will build their own new facilities. Some of these suppliers are also in the OLED display business and it is not impossible that older-and perhaps depreciated-lines once used for OLED displays will be switched over to making OLED lighting. This could, at least, be a temporary solution for risk adverse OLED lighting firms.
All of these speculations are based on an assumption that it will be possible to scale up OLED lighting production in a cost-effective manner. And this, too, is very much an open question. All of the production facilities for OLED lighting that have been built to date are pilot projects in name or actuality and the path that the owners of these facilities will take to upgrade these facilities is far from clear. This is partly an investment decision; that is, it is hard to know at this point how much the firms that have built early facilities will be willing to invest to bring them to full-scale. However, this is almost a secondary consideration in that we know that the firms that have these pilot projects up and running clearly have the financial resources to turn them into full-scale facilities if they want to. The big question is whether in the final analysis they will want to. And then there is the question of which large firms are going to jump into the OLED lighting market with both feet and build substantial OLED manufacturing plants from scratch.
More information can be found in the report “A Capacity and Opportunity Analysis of OLED Lighting Manufacturing” by NanoMarkets.
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